Shell GTL Fuel British Marine Expo - Mousa Baraka GTL Market Development Manager February 2020
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Shell GTL Fuel
British Marine Expo
February 2020
Mousa Baraka
GTL Market Development Manager
Copyright of Shell International GTL Market Development February 2020 1
Definitions & Cautionary Note The New Lens Scenarios are part of an ongoing process used in shell for 40 years to challenge executives’ perspectives on the future business environment. We base them on plausible assumptions and quantification, and they are designed to stretch management to consider even events that may be only remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities. It is important to note that Shell’s existing portfolio has been decades in development. While we believe our portfolio is resilient under a wide range of outlooks, including the IEA’s 450 scenario, it includes assets across a spectrum of energy intensities including some with above –average intensity. While we seek to enhance our operations’ average energy intensity through both the development of new projects and divestments, we have no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years. The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this presentation refer to companies over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations” respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest. This presentation contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward- looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this presentation, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this presentation are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s Form 20-F for the year ended December 31, 2016 (available at www.shell.com/investor and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, February 2020. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. We may have used certain terms, such as resources, in this presentation that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov. You can also obtain this form from the SEC by calling 1-800-SEC-0330. Copyright of Shell International GTL Market Development February 2020 2
Global Energy Challenge
◼ Global energy demand is expected to be 60%
higher in 2060, as populations grow, living
standards rise and more people live in cities.
◼ Challenge: provide more energy with less CO2
emissions
2015 2100
~500 EXAJOULES ~1.000 EXAJOULES
Energy consumption per year Energy consumption per year
Double world energy usage
Copyright of Shell International GTL Market Development February 2020 3
The Emissions Challenge
Global Climate Change Local Air Quality
Impact: Global economy Impact: Human Health
Timeline: Small effects in the short term Timeline: Immediate
grow more severe longer term
Cause: Predominantly NOx and Particulate
Cause: Greenhouse gas emissions emissions
Copyright of Shell International GTL Market Development February 2020 4
Towards a More Sustainable Future
Premium Fuels GTL Fuels CNG/LNG E-Mobility Biofuels Hydrogen
Best Performance with Gas to Liquid (GTL) Natural Gas Now Makes Up Evaluation of Options Development of Conventional Aiming to Accelerate Growth
Latest Engine Technology Fuel Technology 50%+ of Shell’s Production & Advanced Biofuels
Unique formulation is Forefront of GTL technology LNG pioneer with 50+ Shell is exploring a role Involved in distributing Shell is active in Hydrogen
designed to improve & production for 30+ years. years of expertise. in the charging of EVs. biofuels for 30+ years. electric and is part of several
performance through initiatives to encourage the
advanced technology GTL gasoil – an LNG as transport fuel adoption of hydrogen as a
alternative diesel fuel for trucks & ships. transport fuel.
which will contribute to
the diversification of the
diesel fuel supply, and help
improve air quality in cities.
Performance Fuels Energy Diversification through more Gas CO2 Solutions
Copyright of Shell International GTL Market Development February 2020 5
What is Shell GTL Fuel?
A cleaner burning synthetic diesel alternative
◼ Derived from natural gas
◼ Liquid at room temperature
◼ Great performance in unmodified diesel
engines in any blend ratio from 0 to 100%
◼ Colourless
◼ Odourless
◼ Higher Cetane number than diesel
◼ Virtually sulphur-free
◼ Virtually aromatic-free
Shell
Copyright of Shell International GTL Market Development
GTL Fuel Diesel
February 2020 6
Shell GTL Fuel has many advantages
Drop in fuel Lower emissions
Easy to utilise with new and older on- Lower regulated emissions (PM, NOx,
road diesel engines. No infrastructure CO, & HC)
investment required
Can reduce noise Non-toxic & Readily Odourless Cold start Storage stability
Engine noise reductions biodegradable Greatly appreciated by Excellent low temperature No bio component and good
of 1-4 dB Benign and biodegradable customers performance, low cloud point oxidation stability
unlike conventional diesel
Copyright of Shell International GTL Market Development February 2020 7
Shell and Neste have conducted multiple emissions trials for over 10 years • NOx emissions benefits lie within the 3% to 18 % benefit range • Particulate Matter benefits lie within the 12% to 48% benefit range
Marine Trials: Emissions Benefits
Endelave (Sep 2018)
Caterpillar 3508
◼ Test carried out on one of two main engines.
◼ Test as per E3 test cycle according to IMP MARPOL
Annex VI.
◼ Two cruise speeds and idle (3 in total)
◼ Results
Source:
◼ NOx: 12 -18% reduction
◼ PM: 32 - 46% reduction
◼ CO: 0-37% reduction
◼ HC: 6% - 27% reduction
GTL Market Development February 2020 9
Answering the CO2 Challenge
Bundling GTL with Shell’s new Nature Based Solutions to launch:
Shell
GTL Fuel
with Carbon Offsets
Copyright of Shell International GTL Market Development February 2020 10Gas-to-Liquids Technology
Catalytic process to convert gas to oil products
Stage 1: Gasification Stage 2: Synthesis Stage 3: Hydro-Cracking and Separation
SYNGAS
+ + + HYDRO-CRACKING
CATALYST
Methane Oxygen Hydrogen Carbon Fischer Tropsch Wax + Water
(natural gas) (from air) Monoxide
Copyright of Shell International GTL Market Development February 2020 12Composition of Diesel and GTL Fuel
Diesel EN 590 GTL EN 15940
Copyright of Shell International GTL Market Development February 2020 13EN15940 fuels are widely available in Europe GTL Global GTL diesel production is currently at around 8.5 Billion litres per year, and expected to rise to between 10 and 18 Billion litres in 2030 based on currently announced projects. HVO Global HVO Renewable Diesel production capacity in 2016 was around 5 Billion litres. The majority of the product is sold in the EU. The global production capacity is expected to increase to around 9 Billion litres, by 2020, from the announced projects. Copyright of Shell International GTL Market Development February 2020 14
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